Spain's PSOE suffers bruising defeat to conservatives in local vote

Spain''s ruling Socialists headed for a crushing defeat in local elections on Sunday, punished by voters after a week of mass public protests over high unemployment levels and a stagnant economy.

With 85 percent of votes counted nationwide, the centre-right Popular Party had 37 percent of the aggregate municipal vote.

The Socialists were 9 percentage points behind, heading for their worst showing in municipal elections since Spain returned to democracy in 1978 after the Francisco Franco dictatorship, and losing control of major cities including Seville and Barcelona.

The rest of the votes were divided among an array of smaller parties.

"We must congratulate the PP since they''ve won Spain''s municipal elections by a wide margin," said Deputy Prime Minister Alfredo Perez Rubalcaba, who is widely seen as a possible Socialist candidate for the next parliamentary elections.

Tens of thousands of Spaniards fed up with the highest unemployment rate in the European Union -- 21 percent -- demonstrated in cities around Spain all week, urging voters to reject the two main political parties.

On Saturday night their numbers peaked, with around 30,000 people in Madrid''s Puerta del Sol alone, witnesses said. Analysts said the protests would have only a marginal impact on the voting as opinion polls already showed Socialist defeats.

"I''ve voted for the PP because the Socialists are doing a very bad job ... It''s true there''s been a worldwide crisis, but Zapatero didn''t react to it on time," said Jesus Lopez, a retired man voting in the Arguelles neighbourhood of Madrid.

Spaniards were electing more than 8,000 city councils and 13 out of the country''s 17 regional legislatures.

Prime Minister Jose Luis Rodriguez Zapatero, applauded abroad for his fiscal discipline during the euro zone crisis, has become unpopular at home as the economy stagnates.

Almost half of Spaniards aged 18-25 are out of work, more than double the European Union average.

Partial vote counts showed the Socialists would lose bellwether region Castilla-La Mancha, just south of Madrid, where they have controlled the regional legislature for decades, and the city of Seville, where they have been in power for 12 years.

Barcelona, the capital of wealthy Catalonia and another Socialist stronghold, also looked to have been lost with early counts showing the nationalist CiU party taking the most votes and expected to form a coalition with the PP.

The Socialists, in national office since 2004, also look likely to lose the next parliamentary election, which is scheduled for March 2012 but could be moved up if big losses on Sunday spark a leadership crisis within the party.